Bank of America Global Research discusses EUR/USD outlook and sees the pair staying in a tight range in the near-term, while maintaining a year-end target at 1.15.
"Assuming risk assets remain supported, last week we argued that such monetary policy divergence is positive for the commodity currencies against the relative safe havens. We see EURUSD in a tight range for now, with US inflation and the ECB Strategy Review the main drivers for the rest of the year. We remain bearish EURUSD in our end-year forecast, subject to these risks," BofA notes.
"In the meantime, the USDCNH fixing keeps getting lower. USDCNH is strongly (negatively) correlated with EURUSD. We have been arguing that the answer to the USD question may be in China," BofA adds.